About 500 acres of New Mexico public land in the Permian Basin were sold to the oil and gas industry Thursday in the first lease sale held under the administration of President Joe Biden since taking power in January 2021.
Upon assuming office last year, Biden and the Department of the Interior halted new federal oil and gas land leases while it reviewed its fossil fuel policy.
Later that year a federal court in Louisiana issued an injunction, in a lawsuit filed by multiple oil-producing states not including New Mexico, ordering the federal government to resume the sales held regularly under Biden’s predecessor President Donald Trump.
Since then, the sale of leases for lands in Lea and Chaves counties, within the U.S.’ most active oil and gas region in the Permian Basin, were delayed multiple times as the Interior Department and its sub-agency the Bureau of Land Management conducted stricter environmental analysis as called for by the administration.
During his campaign and since taking office, Biden and his cabinet vowed to take broad action to reduce pollution while also increasing returns to American taxpayers for activities like extraction on public land.
The BLM’s New Mexico office announced the June 30 lease sale netted $632,385 in the sale of five parcels in New Mexico counties and another the office oversaw in Dewey County, Oklahoma.
In total, the sale offered 535 acres of public land leases, and all of it was sold to oil and gas companies.
Eight unnamed companies filed bids, BLM records show, with the highest per-parcel bid reported at $610,221.
The latest sale saw the BLM increase its royalty rate paid on the leases by the bidders to 18.75 percent – the first time ever the rate was raised, per a BLM news release.
This temporary measure was recommended by the Interior Department’s November 2021 report developed during the pause on new leases, along with a reduction in the number of parcels and acreage offered in lease sales held this year across the American West.
Environmentalists in New Mexico applauded the policy changes but were critical of the federal government for holding the sales which critics said would only continue environmental damaged brought on by the fossil fuel industry.
A coalition of environmental groups filed a lawsuit Tuesday – two days before the lease sale – aiming to block the resumptions of lease sales on 127,510 acres in western states.
The suit questioned leases offered this week in New Mexico, Colorado, Montana, Nevada, North Dakota, Oklahoma, Utah and Wyoming.
Jeremy Nichols with Santa Fe-based WildEarth Guardians, which was a plaintiff in the case, said oil companies should not be allowed to use more public land for extraction while already profiting from high energy prices.
Gas prices climbed in recent weeks as demand for fuel increased at the start of the summer travel season amid the world’s recovery from COVID-19 and widespread lifting of travel and business restrictions.
AAA reported Friday the nation’s average gas price was $4.84 a gallon, while New Mexico averaged $4.66 a gallon.
New Mexico’s all-time highest gas price was reported on June 15, AAA reported, at $4.83 a gallon.
“While people are getting gouged at the pump by greedy oil and gas companies, the Biden administration is bending over backward to give more breaks to the industry and sell public lands for fracking,” Nichols said.
“This isn’t just undermining our climate, it’s undermining our nation’s ability to transition away from costly fossil fuels and toward cleaner, more affordable energy.”
In a statement from the Permian Basin Climate Justice Coalition, a consortium of environmental groups advocating against oil and gas development in the region spanning southeast New Mexico and West Texas, the group argued energy companies already hold leases for “thousands of acres” of public land that are unused.
“It’s long past time for our federal government to phase out oil and gas fracking and to prioritize our climate, environment, and public health above a profiteering industry that got us into the climate crisis in the first place,” read the statement.
“It’s imperative that the federal government end leasing on public lands if the Biden administration has any hope of meeting its climate goals.”
And despite the recent lease sales held, oil and gas industry groups remained critical of federal policies they argued lead to higher energy prices paid by American consumers, blaming the Biden administration for stymying domestic production as a leading economic driver for the nation.
“President Biden’s ongoing efforts to stop federal oil and natural gas development not only raises energy prices for Americans, but also threatens the billions of dollars the industry provides to maintain and conserve national parks and other public lands,” said Aaron Johnson, spokesman for the Western Energy Alliance, in a statement.
“Unless these policies are reversed, we’ll soon see this critical revenue stream dwindle as federal oil and natural gas production declines.”
Adrian Hedden can be reached at 575-628-5516, [email protected] or @AdrianHedden on Twitter.